The Private Sector Response to Climate Change

Policy experts have proposed numerous approaches to mitigating climate change, from federal carbon taxes and power plant regulations to international agreements. Although many experts assume that climate change policy must come from government entities, our interdisciplinary research team has focused on an important development that has received less attention: the increase in climate mitigation efforts by private organizations. This private sector climate action entails private corporations acting alone and with other private organizations to perform the traditional government function of reducing a threat to the environment.

Our TIPS-funded research team is exploring a fascinating new form of private climate governance: private sector programs that offer “employee energy benefits” (EEBs). Organizations have increasingly focused on employee energy and environmental behaviors as part of their corporate environmental strategies. This is important because it is difficult to reach individual behavior through programs that target the 100 million-plus households in the United States. However, many corporations employ thousands of employees, so if EEB programs are effective, they can fill a large gap in the global response to climate change.

Although corporations have focused most of their attention on employee behavior in the workplace, some are also using EEBs to target employee energy behaviors in the home. Examples of EEBs include household energy efficiency information, rebates on home solar panels, discounts for hybrid vehicles and public transportation access and incentives. In a 2009 paper, we calculated that with non-intrusive, state-of-the-art programs the average household in the U.S. could adopt enough energy efficiency and conservation measures to reduce its carbon dioxide emissions by 20 percent, or 5.8 metric tons per year. Consider the implications of this for large employers: If Walmart employees were able to obtain this level of emission reductions (perhaps with the help of EEBs), the numbers imply that its 1.5 million employees in the United States could reduce their total emissions by 8.7 million metric tons of carbon dioxide per year, equal to the annual emissions of 300,000 American households.

Although EEBs have the potential to significantly influence employee environmental behaviors, little is known about them, such as who is offering them, what impact do they have on employees and what motivates employers to offer them and employees to participate in them. By drawing upon employer reports and conducting a survey of U.S. adults employed full-time, we found that these benefits were offered to 17 percent of employees, and included a vast array of strategies and approaches. Survey responses suggested employers were perceived to offer EEBs to maximize their competitive advantage and because of social responsibility concerns. We also found that EEBs were linked to employee environmental behavior and morale. This work suggests numerous lines of promising new research. Although the findings from this survey are not meant to be definitive, they demonstrate that a small but significant portion of U.S. full-time workers (likely 10 percent or more) are participating in these programs. They also suggest several fruitful areas for future research as well as the potential for a more targeted approach for employers considering offering EEBs.

In an online study, we randomized individuals from across the country to reading about different types of climate change policies. Some people read about either the public governance strategy of government regulations (e.g., federal regulations targeting reductions in carbon emissions from power plants) or a federal carbon tax. Others were randomized to reading about private sector actions that companies are taking to reduce their carbon emissions. We found that reading about private sector action that targets climate mitigation, as compared to public governance approaches, led to increased support for private sector action and increased support for reducing carbon emissions, particularly among conservatives. This increased support occurred in part because conservatives perceived these approaches to be feasible and effective. Furthermore, the increased support did not lead to deceased support for public governance approaches.

Across all of our work, we find that one promising, and underexplored, route to meaningful reductions in carbon emissions is more deliberate consideration of private sector actions. In addition to scholarly articles, our interdisciplinary team has focused on outreach to undergraduate, graduate and professional students, and to the community. This research is also featured in a book that will be published this fall, Michael P. Vandenbergh & Jonathan M. Gilligan, Beyond Politics: The Private Governance Response to Climate Change (Cambridge University Press).

One Comment on “The Private Sector Response to Climate Change”

For most of the history of this country we have taken pride in being individuals. This is an excellent example of how personal responsibility could change the world in such a positive way, rather than waiting for “group think.”